Policy to chart out roadmap for SEZs soon
Thursday, 16 August 2007
FE Report
The caretaker government is likely to give legal coverage to new generation economic zones that will pave the way for greater public-private partnership, a source at industries ministry said.
The International Finance Corporation (IFC) will provide financial and technical support for the formulation of an economic zone policy, first of its kind in Bangladesh.
"The IFC will engage local and international consultants to frame the policy. The policy is expected to usher in a new era in the history of Bangladesh's publicly-managed zone regime," an official of the industrial ministry said.
If approved, such a policy will allow foster new partnership between the government and private investors in zone development and management, while also paving the way for establishing a separate authority to oversee special economic zones.
The sources said the policy will chart out a roadmap for the "holistic" as well as "geographically balanced" approach to the development and management of new generation zones.
The sources added: "Encouragement of public-private partnership, adoption of commercial principles and capacity-building of the relevant agencies are also central to the success of zones."
The interim administration agreed, in principle, to establish SEZs in the light of successes in Jordan, Dominican Republic, Dubai and China.
Industries ministry officials said the present caretaker administration will also take India's case into consideration where the experience of SEZs has not been so encouraging.
The government-run EPZs in Bangladesh have netted nearly $1.1 billion in total investment between 1983 and 2005, accounting for nearly 20 per cent of annual exports, and 25 per cent of the country's total foreign direct investment, according to official statistics.
But a World Bank study on "Piloting reforms in economic zones" said the impact of EPZs and industrial estates remains "modest", due to lack of modernisation and reforms.
"Rather than being a part of an integrated private sector development strategy, the EPZs regime in Bangladesh has been more of a stand-alone initiative and has led to modest impacts," the study maintained.
"Bangladesh should pursue reforms that leverage the benefits of public-private partnerships, combining public sector regulation with private sector-driven economic zone development along principles of demand responsiveness and commercial viability," the report noted.
"In the medium-term, by scaling up reforms nationwide and maximising linkages between the zones and the economy at large, economic zones can create a multiplier effect on growth," added the report.
Private sector experts believe the spillover effects-in the form of job creation, investments, transfer of management skills and technology-of SEZs would be much greater compared to those of traditional industrial parks.
The caretaker government is likely to give legal coverage to new generation economic zones that will pave the way for greater public-private partnership, a source at industries ministry said.
The International Finance Corporation (IFC) will provide financial and technical support for the formulation of an economic zone policy, first of its kind in Bangladesh.
"The IFC will engage local and international consultants to frame the policy. The policy is expected to usher in a new era in the history of Bangladesh's publicly-managed zone regime," an official of the industrial ministry said.
If approved, such a policy will allow foster new partnership between the government and private investors in zone development and management, while also paving the way for establishing a separate authority to oversee special economic zones.
The sources said the policy will chart out a roadmap for the "holistic" as well as "geographically balanced" approach to the development and management of new generation zones.
The sources added: "Encouragement of public-private partnership, adoption of commercial principles and capacity-building of the relevant agencies are also central to the success of zones."
The interim administration agreed, in principle, to establish SEZs in the light of successes in Jordan, Dominican Republic, Dubai and China.
Industries ministry officials said the present caretaker administration will also take India's case into consideration where the experience of SEZs has not been so encouraging.
The government-run EPZs in Bangladesh have netted nearly $1.1 billion in total investment between 1983 and 2005, accounting for nearly 20 per cent of annual exports, and 25 per cent of the country's total foreign direct investment, according to official statistics.
But a World Bank study on "Piloting reforms in economic zones" said the impact of EPZs and industrial estates remains "modest", due to lack of modernisation and reforms.
"Rather than being a part of an integrated private sector development strategy, the EPZs regime in Bangladesh has been more of a stand-alone initiative and has led to modest impacts," the study maintained.
"Bangladesh should pursue reforms that leverage the benefits of public-private partnerships, combining public sector regulation with private sector-driven economic zone development along principles of demand responsiveness and commercial viability," the report noted.
"In the medium-term, by scaling up reforms nationwide and maximising linkages between the zones and the economy at large, economic zones can create a multiplier effect on growth," added the report.
Private sector experts believe the spillover effects-in the form of job creation, investments, transfer of management skills and technology-of SEZs would be much greater compared to those of traditional industrial parks.